Published in the Department of Industry, Innovation and Science Industry Insights, 1/2018
Australia is highly urbanised, and becoming more so. Population has grown faster in our cities than elsewhere over the past decade. In a contribution to the new Industry Insights publication of the federal Department of Industry, Innovation and Science, Grattan Program Director Danielle Wood says governments should not fight the ‘gravitational’ pull of the cities. Past attempts at intervention have been expensive and did little to increase regional growth and productivity.
Governments are better off focusing on building and maintaining transport infrastructure links (but only where the benefits outweigh the costs) and improving the quality of services in regional areas. Ultimately, policy makers must work with, not against, the forces shifting Australia’s economic geography. Governments can’t push economic water uphill, but they can smooth the transition by ensuring that regional areas have access to good-quality services and that our cities are flexible enough to cope with growing numbers of people and activity.